All Forum Posts by: Account Closed

I've always used "Breakdown of our Landlord/Tenant Relationship" and it's in the Lease Agreement.

Example:  A tenant constantly telling me how to run my business, or insults me or gives me a hard time and I want to terminate their tenancy with me if they are on a month-to-month Lease Agreement. 

Dear Tenant

Please be advised that  I will not be renewing your lease which will be expiring on ______

due to the breakdown of  our Landlord/Tenant Relationship.   I'm sorry that you were not happy here,  and wish you much success for your future.

Sincerely,

Nancy Neville

For Dianna:

The Tenant Phase by Nancy Neville

THE FIRST MONTH (THE HAPPY PHASE)

During the first month of a rental period, the tenant is happy. They wanted the home, they got the home and everything is fine. THEY ARE VERY HAPPY! You spent a lot of time at the signing of the lease telling them what you expect from them and what they can expect from you. They seemed to be happy and they nodded in understanding.

THE SECOND MONTH

Somehow during the second month, when the newness wears off and the happiness falls into a routine, the new tenants become confused. They seem to forget what the rules are and when rent is due (even though they have a written lease agreement to refer to). If they are one of the few tenants who do not get confused during this time, this means they have jumped from the Second Month phase into the TESTING PHASE which may cause a few problems, but I will talk about that in a few minutes.

To help the Tenants not be confused during the 2ND MONTH PHASE, I always bill my Tenants their rent 10 days before it is due. It's during the 2ND MONTH PHASE that I will answer any questions they have and not make them put it in writing.

TESTING PHASE (May begin as early as 2nd month)

The TESTING PHASE is a very crucial phase. Whether the tenants and you get along is determined during the TESTING PHASE. More Tenants than not like to Test the Landlord. If they had gotten away with it with their previous landlord, chances are, they feel they can get away with it with you.... so they will try. They will pay their rent when they want to, putting you last and live the way they want to regardless of your rules.

It is very important to nip this in the bud during the TESTING PHASE, because if you allow the tenant to get away with things such as paying their rent when they want to and doing what they want, then chances are you will never proceed past the TESTING PHASE.

THE THIRD MONTH:

If you make it to the third month, that is good. But it is also very crucial during this time as well to make sure the tenant stays on course. The Third Month strengthens your position as to who runs what. During this time you want to make sure that the tenant keeps paying their rent on time and keeps obeying the rules. One little falter on your part can throw the tenant back into the TESTING PHASE. It is very important that you guide them during this time as to what you expect and want. It is important that you gain their trust and respect during this time.

THE FOURTH MONTH - THE COMFORT PHASE:

The fourth month through the first year is THE COMFORT PHASE: the tenant becomes accustomed to your rules and is starting to feel comfortable. If you have handled everything correctly, being strong when needed to be, and doing evictions when needed, the Tenant will feel secure because the Tenant will know what is expected of them and will feel comfortable and will want to stay. (Tenants usually feel comfortable with stability and sameness).

AFTER THE FIRST YEAR:

After the first year, the COMFORT PHASE becomes more stable and each year thereafter. It's just a matter of keeping your Tenant happy, yet, making sure they don't slip into the Testing Phase from time to time. Even old time Tenants will want to go to the Testing Phase if they see their Landlord falter, get too over generous or too understanding.

When that happens the Tenant's stability changes because the rules are changing throwing the tenant into the Testing Phase again, so we don't ever want to falter but always stay strong and in control.

THE MOVING PHASE:

During the moving phase the Tenant, no matter how many years they have been with you, seems to forget everything again. They become babies and they revert back to the TESTING PHASE. Once again they never refer to the Lease and must depend on you for answers.

During the MOVING PHASE, the Tenant can change personalities quickly. It's like they drank a potion that changed them from Jekyll into Hyde. They become this fiend, this villain that could destroy you and is probably the hardest phase of all the phases.

It is during the MOVING PHASE, that you must be cool, have all your wits about you and be prepared, yet still be cordial so as not to enraged the monster that seems to be lurking in your Tenant during the MOVING PHASE (as there is NO ANTIDOTE to calm the savage beast once it takes form). If by chance this happens, it is best to not confront the beast but to keep your distance until the courts can set it free!

With time everything will fall into place as long as you treat Land lording as a business!

Dianna,

What you needed to do was send them a Notice to Quit the very first day rent was late.  They have 7 days, plus 2 full days for mailing them the Notice, (Michigan) to pay or you will file for eviction on them on the 11th.   That should be your rule. 

The moment your tenants began to "bargain" with you, would have made me terminate their tenancy with me, due to the breakdown of our relationship. Never accept ultimatums or threats. (Providing they were on M-T-M) which my tenants always were, just for this reason.  

File that Notice to Quit TODAY.  Plus charge them for the late fee.  If they don't give their 30 day notice to quit now, this month, and it has to be within a rental month.  Meaning, this is already January.  

If their due date was January 1st, they had to give you a 30 Day Notice to Quit, in December.  If they did not and they move, you can charge them not only for January's rent, but also February's.  

All monies owed to you will be deducted from their Security Deposit and you must send them a break down of that to their last known address, (their rental unit) within 45 days.  You will not issues any Security Deposits, until you have proof they have vacated the premises, and then you start adding up damages and money owed. If they have money coming back, which most of them won't, you will issue them a check along with the break down of what you did with their Security Deposit.  If they don't enough to cover the monies owed to you, you can get a money judgment. (some courts will allow you to receive a Judgment for eviction and a money judgment at the same time, but my court didn't.  I had to file two different suits. 

If you receive no answer from them and they move, and you sent them a Notice to Quit, still go to court and get a Judgment.  This way you can garnish their wages if they don't pay.  

Always choose people who are COLLECTIBLE, and who have all the move in fees, and rent.  And never let your heart take over your senses, this is a business and in order to be successful you have to stick to your lease agreement, always, no if's , and's, and buts. 

Nancy Neville

Brigitte, that is a good question.  I personally prefer to run a Profit and Loss Report by class verses by job.

A Profit and Loss Report by Job gives you a Profit and Loss Report by Customers.  A Profit and Loss Report by Class, gives you a Profit and Loss Report by homes that you own.

If you have apartments and vacancies,  and do work on the building or an empty unit, running a profit and loss report by Job won't give you a break down of expenses you made on the building. 

By running a P&L by Class you get the net income for that property, less all the expenses for that property, including the building, instead of just the units inside the building.  Therefore, running a P&L by Job, doesn't give you a true accounting like it would by doing it by class where it entails the building itself. 

Nancy Neville

The COGS Account is used when you flip a house.  It is at this time that you can add all your expenses (Capital Gains, any expense that adds value to the home) as a Fixed Asset Account.  When the house is done with all the necessary repairs, (WIP Work in Progress)  you would then take the total of the Fixed Asset Account (WIP) and transfer it to the Cost of Goods Sold Account.  

The COGS Account subtracts all the cost of the home, including the price you paid for the home, from the Selling Price of the home giving you a New Profit which you will be taxed on.  

Let's say you purchased a home for $35,000.00, and you put $20,000.00 into the house to upgrade it.  Total investment into the property is now $55,000.00.  

You sell the home for $100,000.00 6 months later.

Well, you certainly don't want to have to pay taxes on $100,000.00 for this home, because you didn't really make $100,000.00 profit.  You had expenses.

So by using the COGS account, QuickBooks will automatically deduct the $55,000.00 from the sale of the house leaving you with a more accurate profit of $45,000.00, making this figure what you will have to pay taxes on, as it is this figure that will show up as your Net Income for this house.  

For landlords who don't flip their homes, all expenses you pay out to fix up your homes are Expense Accounts.  Some are Capital Gain accounts, like hot water heaters, furnaces, big time stuff, but nothing more. 

You get to claim those expenses on your tax return.  Your CPA knows how to achieve the best results of your tax returns.  Just provide them with accurate records and let them do their thing. 

But for you to use a COGS account is a no no UNLESS you flip.

Nancy Neville

When you type up an invoice for rent that is due.  In the item column is where you will choose Rent Received or Rent due.  The item "Rent Due" is linked to your Chart of Accounts RENT DUE income Account.  (Or another name that reflects rent due)

Since you didn't know how to do an Invoice, is what makes believe you have skipped some steps in Jon's book.  

Type in Rent Due in the Items List and tab over to amount and type in the amount of payment received.  Click save.

Now you have setup an Income account billing your tenant for rent.  You don't need to send this bill, but you do need to set it up.

Now take their payment by click on Receive Payment from the customer center, and deposit it to your bank.

Now you will see their payment listed as Income.

Nancy Neville

Mike, I know Jonathan, and I know all this stuff is in his book. You need to go back, start all over, and do it the right way.  Your books are all messed up right now and if you don't redo it, your books won't balance EVER!

Practice makes perfect, but following directions in this regard is crucial.

Nancy Neville. 

Click on List on your upper task bar.

Check to see if you have anything that says rent

Lower bottom right corner see if the Chart of Accounts as anything related to rent selected.

If not, you need to do so.  Only then will it show up as income.

Nancy Neville

.

Is Rental Income linked to your Chart of Accounts Income Account.  Double Check that and see.  Do you know how to do this?

Nancy Neville